Just looking over your weekend report. How do you come up with your buy points? Looking at INMD and DKS as an example. Looks like INMD buy point is at retrace to 21 ema. DKS set at break above prior days high. What's the rationale behind. Is it because INMD is in an uptrend and DKS is basing?
Yes! That is exactly correct! INMD is in a strong uptrend and DKS has formed a base. For me, DKS is the "safer" play as it has consolidated, and I have witnessed the crowds at their stores firsthand. INMD has momentum and it not giving us a chance to get in, and that is what strong stocks do in an uptrend.
In a market like this INMD is not going to form a traditional base. It started to form a base during the correction in September, but it came out quickly. The only way to buy a stock like INMD now is on a pullback to a moving average. These types of buys carry more risk and are typically an "add on" buy. I would suggest a smaller position with this type of purchase.
DKS has been consolidating for a few months. The profit-takers and sellers who wanted out are gone now. The buy point is an "early entry" as there is little overhead supply above that level. That chart looks pretty good to me. They report earnings on November 23 and if we do not have a cushion of 11% or greater the risk is too high to hold through an earnings report.
You are spot on with your interpretations of the charts. I hope this answers your questions.
Regards,
Marty
